A response to Digital Britian

The government has announced “plans to help secure Britain’s place at the head of a new media age”. We should be cautious whenever we see governments combining future visions with the word “plan”.

Not surprisingly, the headline measures involve the use of force to construct a “transformation” – in Gordon Browns words – of the distribution of digital broadband, comparing it with what he calls “essential services such as electricity, gas and water”.

This is an upside-down policy approach. Technology, delivery methods and service product innovations are changing rapidly under private initiative, individual traders are juggling for profitable commercial position and the industry is moving on fast. Now leviathan wants in on the act to re-invent a commanding height in the economy that they control. That’s mad.

If ever there was the case for getting out of the way, this is it. The dangers of larger players getting into bed with government using new legislation as an excuse are huge. Producers and service providers are bound to follow market incentives and the government appears about to create incentives to cartelise the industry in the name of equality for old ladies and slow-witted shopkeepers who do not have broadband, and an unknown method of curtailing individuals engaging in file-sharing.

We should not forget that it is possible to get your granny on the internet for essentially zero cost if she can cope with a computer, and as the part owner of a specialist jazz download site I happen to know that it is within the scope of even small companies to develop fullproof watermarking of music. These innovations will strengthen through market incentives through time.

The tangle web the government is weaving is made complicated by their interest in what happens in digitalised television, now under threat from broadband internet. But the threat is a chimera, created by the ossified structures of a quasi-nationalised television industry. We are likely to see a carve up of bandwidth use rights decided on by government which guarantees various incumbent players a secure channel to broadcast audiences. But this horsetrading negates what the market actually does; i.e. fine tune audience preferences through the creative innovation which the internet makes happen. It is time that some old things failed so that new things can take their place. For example, why should local news always be delivered on television? Would it not do local internet services some good it it migrated to the internet? Hey, they could even compete with the tax subsidised BBC online service.

Over the next few weeks, we are going to have a feast of purported details about the “plan” to develop “digital Britain”. Listen, but keep looking at the wider picture, these are dinosaurs stumbling around in Jurassic Park, digitally focussed mammals have been through the fence and out in the new world for a long time and are creating new ways of doing things that governments haven’t even thought about yet.